The digital economy and the era of the hybrid partner
JUNE 27, 2022 • BLOG POST • XAVIER POISSON GOUYOU BEAUCHAMPS, VP, WW SERVICE PROVIDER BUSINESS
IN THIS ARTICLE
- Cloud complexity is causing a shift in partner and customer behaviour
- HPE is enhancing it’s partner experience, supporting those who are embracing a change in business model to meet more customer cloud demands
Xavier Poisson discusses why everybody is becoming a Service Provider
There is great evolution happening in our partner ecosystem right now. Cloud is everywhere and hybrid cloud is the new norm, and so we are responding and supporting our partners as they embrace this trend to evolve their business models and transform.
The digital economy is driving customers to evolve too, they are shifting to consuming services rather than purchasing hardware and managing it by themselves. This change in behavior is down to cloud complexity, where we see businesses struggling to build and run their IT environments in house. There is a desire to utilize the cloud, but transforming an IT environment brings complexity few businesses can handle, and requires specialist skills that a lot of companies just don’t have. The issues these customers are facing include everything from technical debt, cost control issues, data management concerns, security risks, and complexities of multiple cloud vendors or environments. However for our partner ecosystem this is also where the opportunity lies.
Managed services are considered the next frontier of cloud operations and management. Partners who operate as a service provider can offer their customers the ability to run their IT environment for them, or at least make it easier for them to run themselves.
This market trend means partners are no longer defined by one persona, instead we are in the era of hybrid partners who act as resellers, system integrators, colocation companies and service providers, and in some cases, pure vertical industry players also act as service providers. The great news for everyone in our ecosystem is that HPE’s strategy is built to embrace multiple partner personas, to support the growing number who are looking to lead with services, manage customer environments, provide cloud services, and drive annual recurring revenue (ARR).
The relationships our partners have with their customers is the biggest asset of the ecosystem. At HPE, we never underestimate the value partners bring with their customer knowledge, history and loyalty. Partners have built a trusted relationship that they don’t want to lose to the hyperscalers as the customers embrace hybrid cloud architectures. Engaging proactively with their customers on their journey, and becoming a service provider, allows partners to maintain and expand their role of trusted advisor with the customers while offering them a new range of services.
The opportunities for partners to capitalize are endless. By going beyond the traditional transactional business, our partners can expand their margins while creating a new stream of recurring revenue, which enhances the value of their companies as shown by 451Research who predicts that the Total Managed Services 2020-2025 CAGR is 14.4%1. Further research also shows that, as they transform and become service providers, partners can generate additional revenue by offering a number of cloud features and functionalities such as governance/compliance, ML/AI, data analytics, cost optimization and management, and application performance monitoring.
Our service provider network is an integral component of the HPE strategy and ability to deliver everything as a service to customers around the world, encompassing both national cloud service providers and managed service providers. With HPE our channel partners are included and valued in the go-to-market route of our company strategy. We partner as one team with every company joining us, whatever their current or desired business model. And we go one step further, we actually reward our partners for being on this journey and transitioning to an as-a-service company too.
As the news announced this week at HPE Partner Growth Summit 2022 demonstrated, we are enhancing the partner experience, supporting those who are embracing a change in business model to meet more customer cloud demands. We provide personalized and ongoing training for skillsets that lend themselves to service provider models, we protect margins with deal registration and new business opportunity schemes, and our HPE Engage & Grow offers and promotions reward partners for selling our innovative solutions to new logos and customers of all sizes. When it comes to co-selling with us, our partner program is unique and compensates HPE end user sales representatives when they engage their customers with HPE certified service providers’ single or multitenant services the same way as if they would be selling HPE products and services. Last but not least, HPE invests and engages proactively with a service provider focus first in large regional initiatives such as Gaia-X or Smart Africa, paving the way for service providers to play a major role in the new generation of distributed and decentralized cloud federations which are required for a fair, sustainable and trusted digital economy everywhere in the world.
With partners remaining at the heart of everything we do, our service providers will continue to be a growing part of the HPE partner ecosystem and our strategy for service providers is clear. We accelerate their time to market with our portfolio of solutions ready for service providers, we help them to transform through HPE GreenLake and HPE Financial Services, we collaborate through a strong co-selling program and we bring them the best of sustainable cloud infrastructure and software. Together, HPE and our service providers deliver a global cloud capability through multi-tenant and hybrid cloud services to our mutual customers.
1 Market Monitor: Cloud, Hosting and Managed Services 2021, 451Research